In another step between the ongoing feud between Illinois Governor Bruce Rauner and Chicago Mayor Rahm Emanuel, the rookie Republican governor launched a formal investigation, through the Illinois State Board of Education, into Chicago Public Schools, and requested several documents related to finances, including cash flow reports, three-year projections, and payroll records.
Less than a month ago, Rauner said that he was going to launch a state takeover of the financially troubled school system, as Emanuel was unable to manage it, along with his chosen CEO, Forrest Claypool.
Rauner, who faces a state legislature controlled by Democrats, refused to negotiate a state budget for the fiscal year, unless lawmakers agreed to a reform agenda that would target the power of the unions, retool workmen’s compensation, and limit the amount of compensation granted. Illinois lawmakers rejected this plan, and there has been a stalemate ever since then, one that has left the state without a budget, and a $ 7 billion pile of unpaid bills.
The Chicago Tribune reported that “ISBE said CPS was put on ‘financial watch status’ in March 2015. That allows the state to require financial information “relevant to a proper investigation of the district’s financial condition and the delivery of appropriate state financial, technical, and consulting services to the district,” ISBE said in its letter to Claypool.
The deadline is March 4, but some observers have called Rauner’s move political grandstanding since there is no legislative power, or authority for his proposed takeover. Other have said, notably CPS officials that the move is designed to further weaken revenue efforts, such as the recent bond raise; one that cost the school $725 million in interest.
ISBE officials in their letter cited the reason for the request: “As you may be aware, an investigation into a district’s financial condition is the first step in a process of determining if conditions exist for ‘certification of financial difficulty,” and,
“Our sincere hope is that the forthcoming investigation will identify opportunities for actions to be taken that will improve the financial condition of Chicago Public Schools, and most importantly, result in fiscal stability.”
In what has become an ongoing battle between the governor and the city of Chicago, CPS says that inequality of state funding and pension payments (Chicago is the only city that pays its own, instead of the state), and unequal per pupil payments based on real estate taxation, have created an impasse that is unfair to students. Claypool retorted that the state’s arrangement with its largest district, where nearly eight of nine children are poor, is a “raw deal,” and he urged other districts by name to lobby for a fairer funding formula, said the Chicago Sun Times.
Rauner, in his annual budget address Wednesday, argued that “CPS benefits from a ‘special deal’ in which the district receives hundreds of millions more in funding from the state than districts with similar student demographics,” reported the Tribune.
In an effort to control the $1 billion deficit, Claypool has announced administrative layoffs, as well as the bonds. “We’ve bought ourselves some time,” Claypool concluded. Finances could get a little tight in July but then the district will get its second-half property tax payment, he said to Crain’s Chicago Business. Continuing in that vein, he also said, “The irony is that the governor who’s calling out CPS leads a state with $7 billion in bills and can’t pay them.”
CPS spokesperson Emily Bittner told reporters, “The last time Governor Rauner offered his financial advice for Chicago Public Schools, Chicago taxpayers were forced to pay even more for our bonds, and we cringe at what his latest venture could cost our children.”